Issuing flow-through shares

The issuing corporation must be a principal-business corporation (PBC). A PBC is a corporation whose principal business is either, or any combination of:

• the production, refining or marketing of petroleum, petroleum products, or natural gas;
• exploring or drilling for petroleum or natural gas;
• mining or exploring for minerals;
• the processing of mineral ores for the purpose of recovering metals or minerals from the ores;
• the processing or marketing of metals or minerals that were recovered from mineral ores and that include metals or minerals recovered from mineral ores processed by the corporation;
• the fabrication of metals;
• the operation of a pipeline for the transmission of oil or gas;
• the production or marketing of calcium chloride, gypsum, kaolin, sodium chloride, or potash;
• the manufacturing of products, where the manufacturing involves the processing of calcium chloride, gypsum, kaolin, sodium chloride, or potash;
• the generation of energy using property described in Class 43.1 of Schedule II to the Income Tax Regulations, and the development of projects for which it is reasonable to expect that at least 50% of the capital cost of the depreciable property to be used in each project would be the capital cost of property described in Class 43.1 of Schedule II to the Income Tax Regulations.

When at least 90% of a holding company's assets are composed of shares in or indebtedness of one or more PBCs related to it, the holding company may qualify as a PBC.